Cameron Backtracks On Vow To Slash State Spending

(Daily Mail) – DAVID CAMERON yesterday watered down his plans to take an axe to state spending.

The Tory leader promised he would tackle the deficit immediately but said cuts did not have to be ‘particularly extensive’ at first.

His comments suggest a softer approach to the public finances amid warnings of a possible double dip recession.

Chancellor Alistair Darling has warned that over-hasty deficit reduction could derail economic recovery.

Speaking at a lunch with business leaders, Mr Cameron said: ‘Plans that don’t start now are not particularly meaningful. I think you have to see some early action.

‘And early action doesn’t have to be particularly extensive, it just has to be early, and it has got to be action.’

He has promised to tackle the record £178billion budget deficit following the release this week of weaker-than-expected growth figures.

Mr Cameron has warned Britain faces a Greek-style debt crisis unless cuts begin this summer along with ‘bold’ steps to reinvigorate the economy.

In a speech at the World Economic Forum in the Swiss ski resort of Davos, the Tory leader said: ‘Our reputation rests on rejecting the course of inaction and the path of least resistance.

‘Instead we must be bold enough to make the right judgment – however difficult that may be – to ensure the long-health of our economy and restore Britain’s reputation on the world stage.

‘The stark truth is that today, Britain’s reputation is at risk. To deal with this we need to make sure people can look at our budget deficit without worrying about our creditworthiness.’

Conservative sources denied that Mr Cameron was rowing back on his pledge to cut spending.

But Vince Cable, LibDem Treasury spokesman, said: ‘The Tories’ confused statements about cuts show that they don’t really know what to do about the economy.

‘In their desperation to sound tough on public spending, the Tories didn’t take economic reality into account.

‘It is of course necessary to cut public spending but this must be done when the economy is strong enough to cope.

‘The economy remains dependent on artificial money creation and a Government running a massive deficit, but with growth of just 0.1per cent, immediately slashing government spending would be disastrous.’

Treasury chief secretary Liam Byrne said: ‘Just as Britain’s families and businesses have fought through from recession to recovery, Mr Cameron offers a betrayal in the mountains of Davos.

‘Instead of backing Britain’s recovery, he dogmatically insists he’ll slam on the brakes come what may – even if it forces a double dip recession.

‘He either doesn’t understand economics or doesn’t care about people’s jobs.’

Last year, Mr Cameron outlined £7billion a year of cuts to public services – including an end to tax credits, baby bonds and a cap on public sector pension payouts.

Civil Service Job Cuts On Way

(Telegraph) – A MASS CULL OF SENIOR MANDARINS will see redundancies across Whitehall as part of plans to reduce staffing costs by £100 million a year.

Gordon Brown plans to announce that this week’s pre-Budget Report will contain £12 billion in efficiency savings, including £650 million from sacking consultants and press officers.

The Prime Minister will also claim that £500 million can be saved through energy efficiency measures such as turning out lights in government buildings.

The redundancies are part of a package of Whitehall cuts called Smarter Government, to be outlined by Liam Byrne, the Chief Secretary to the Treasury, which is designed to achieve a 20 per cent reduction in the senior civil service budget.

As well as job losses, savings will be made through relocating hundreds of staff outside London, tackling sickness levels, and renegotiating pay settlements.

Department heads will be responsible for deciding where the axe will fall, with up to one in five civil servants jobs at risk.

In a speech later today, Mr Brown will say: “As the country emerges from recession, taxpayers want more than ever to see their contributions used in the same way they manage their own finances – by getting maximum value for money.

“And these new forces are leading to new and greater demands from the public for more accountability, more openness, more control and more efficiency.

“In order to protect the front line services we value at a time when budgets are tighter it means we need to do what households up and down the country do.

“To prioritise the necessities and postpone the things we can do without. And government will do the same.

“So to pay for frontline services we must be relentless in finding new ways to save money – and make the tough decisions that will yield them.”

As part of a new emphasis on “value for money,” Mr Brown plans to say that £665 million will be saved by allowing the public to use technology to access the state, such as to book doctors’ appointments or claim benefits online.

A “bonfire of the quangos” will save another £500 million, with a 50 per cent cut in consultants’ fees, and 25 per cent reduction in marketing and communications budgets across Whitehall bringing in another £650 million.

By making a 300 per cent increase in energy efficiency, the Government plans to save £550 million.

In the pre-Budget report on Wednesday, Alistair Darling, the Chancellor, is expected to announce that he has commissioned Bill Cockburn, head of the senior salaries review board, to carry out an audit of civil service pay.

He will tell MPs that it is unacceptable for the swollen public sector to leave private business to bear all the pain of the recession.

The PBR is likely include a number of measures designed to shift the current financial burden on to the wealthy, including moves on inheritance tax and banking bonuses, while introducing severe economies in most departmental budgets.

Mr Darling is preparing to say that in future there will be more transparency over high earners on the public payroll.

Appointments subject to ministerial approval, such as the top civil servants, quango chief executives, regulators and some crown servants, will have to receive the approval of the Chief Secretary to the Treasury if they are paid more than £150,000 a year or £50,000 in bonuses.

A public body wanting to pay a doctor, judge, member of the Armed Forces or council chief a figure above that would be required to write a letter to the secretary of state of the relevant department publicly justifying the move.

And in future, all public servants earning more than £150,000 in pay or benefits in kind should be listed on websites.

The FDR union, which represents senior civil servants, described the proposal for 20 per cent cuts as “irresponsible”.